LNG Tanker Bound For Asia Turns Around, Heads To Europe For Massive Arbitrage Opportunity

Fuel-starved Europe is attracting liquefied natural gas (LNG) tankers from around the world. We reported Monday that a flotilla of US LNG is headed to the continent. There are reports that tankers in the Pacific are turning around and ditching Chinese markets for Europe. 

Bloomberg reports LNG tanker Hellas Diana (IMO: 9872987) left Corpus Christi, Texas, on Nov. 27 has since made a U-turn near Hawaii and is traveling back to the Panama Canal and is likely headed to Europe. 

So far, seven tankers bound for Asia have diverted to Europe as there are massive arbitrage opportunities for US LNG amid an energy crunch on the continent. 

Even though Dutch TTF natural gas prices soared to record highs last week and have since been halved on the news, a US LNG flotilla is in the Atlantic headed for the continent. There is still a lot of money to be made as Europeans are willing to pay a heft premium. 

The massive blowout spread between US and EU natural gas prices has more than halved but is considerably higher than the beginning of the year — implying there’s money to be made in sending US LNG to Europe rather than Asia. 

As long as European natural gas prices remain elevated, more tankers will be diverted to the fuel-starved continent as Russian gas flows remain depressed.